An empirical study of the impact of generic drug competition on drug market prices in China.
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ABSTRACT: Introduction
Generic substitution is encouraged to reduce pharmaceutical spending in China, and with incentive policies, the market size of the generic drug continues to rise. To find out how the generic competition affects drug price in this area, this study examines how the quantity of generic drug manufacturers can influence average drug price in the Chinese market.Methods
This study uses a rigorous selection of drugs from the 2021 China's National Reimbursement Drug List (NRDL), and uses drug-level fixed effects regressions to estimate the relationship between competition and price within each drug.Results
We note that drug prices decline with increasing competition in the Chinese market, but not in a perfectly linear manner, with marginal price declines decreasing after the fourth entrant and "rebounding" at subsequent entrants, especially the sixth.Discussion
The findings suggest the importance of maintaining effective competition between suppliers to control prices, and that the government needs to further control generic pricing, especially for late entry generics, to ensure effective competition in the Chinese market.
SUBMITTER: Yina C
PROVIDER: S-EPMC10248158 | biostudies-literature | 2023
REPOSITORIES: biostudies-literature
Publications
An empirical study of the impact of generic drug competition on drug market prices in China.
Yina Chen C Pengcheng Liu L Haomiao Nie N Yang Cao C
Frontiers in public health 20230525
<h4>Introduction</h4>Generic substitution is encouraged to reduce pharmaceutical spending in China, and with incentive policies, the market size of the generic drug continues to rise. To find out how the generic competition affects drug price in this area, this study examines how the quantity of generic drug manufacturers can influence average drug price in the Chinese market.<h4>Methods</h4>This study uses a rigorous selection of drugs from the 2021 China's National Reimbursement Drug List (NRD ...[more]
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Project description:BackgroundIn recent years, the price of many older generic drugs, including numerous antibiotics, has increased substantially. We sought to analyze recent price changes and extent of generic competition within a cohort of commonly prescribed off-patent oral antibiotics.MethodsWe extracted oral antibiotics recommended for common outpatient conditions in the Infectious Diseases Society of America Practice Guidelines. We determined all US Food and Drug Administration-approved manufacturers for each formulation and strength in 2013 and 2016 and the yearly national average drug acquisition cost (NADAC) price between 2013 and 2016. Wilcoxon signed rank test was used to compare changes in drug prices and number of manufacturers from 2013 to 2016. Spearman correlation coefficient was used to assess the association between drug prices and number of manufacturers.ResultsTwenty-two antibiotics (81 formulations and strengths) were analyzed. There was no change in the median NADAC price or the number of manufacturers between 2013 and 2016. However, 11 (14%) formulations increased in price by 90% or more, and 13 (16%) had 2 or fewer manufacturers during all 4 years. Antibiotic prices were negatively associated with the number of available manufacturers.ConclusionsWhile prices and the number of manufacturers for common oral antibiotics were overall stable between 2013 and 2016, reduced manufacturer competition was associated with increased prices. A subset of antibiotics exhibited substantial price increases, and most, but not all, had limited manufacturer competition. Policy solutions are needed to ensure availability of low-cost, essential generic antibiotics.
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Project description: Not available
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Project description:ObjectivesThe rapid growth of pharmaceutical costs is a major healthcare issue all over the world. The high prices of new drugs, especially those for cancer, are also a concern for stakeholders. Generic drugs are a major price-reducing opportunity and provide more societal value. The aim of this research is to analyse the impact of generic entry on the volume and cost of antineoplastic agents in China.MethodsAn interrupted time-series design examined monthly sales of three antineoplastic drugs (capecitabine, decitabine, imatinib) from 699 public hospitals during January 2011 to June 2016. The first generic entry times (December 2013, December 2012, August 2013, respectively) were regarded as the intervention time points. We estimated changes in volume and cost following the generic entry.ResultsWe found that generic entry was associated with increases in the volume of three antineoplastic agents and decreases in their costs. In terms of volume, generic entry was associated with increases in use of capecitabine, decitabine and imatinib by 815.0 (95% CI -66.5 to 1696.5, p>0.05), 11.0 (95% CI 3.7 to 18.3, p=0.004) and 2145.5 (95% CI 1784.1 to 2506.9, p<0.001) units. The entry of generic antineoplastic drugs reduced the monthly cost trend of three agents by ¥3.1 (95% CI -¥3.6 to -¥2.6, p<0.001), ¥84.7 (95% CI -¥104.7 to -¥64.6, p<0.001) and ¥21.3 (95% CI -¥24.2 to -¥18.4, p<0.001), respectively. The entry of generic drugs attenuated the upward trend in volume of three brand-name drugs and even triggered reductions in the volume of brand-name capecitabine. The entry of generics was accompanied by significant increase of ¥2.6 in monthly brand-name decitabine cost (95% CI ¥0.2 to ¥5.1, p=0.04).ConclusionOur findings suggested that entry of generic drugs impacted use and cost of antineoplastic medicines in China. Generic drugs may improve the availability and the affordability of antineoplastic agents, which would benefit more patients.
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